Ladies and gentlemen, welcome to our 2019 first quarter results call. I'm Kescos, President and CEO, Mick Cossilander, Together with me, I have our CFO, Yuka Ehrond, and Vice President, Investor Relations, Kia and Elias. I will give a brief overview of our business performance. And after that, we will be happy to take questions. Our good progress continued in the first quarter and strategy execution proceeded in all divisions.
The comparable operating profit decreased due to acquisitions that increased seasonal fluctuations and due to market disturbances in the card rate division, in grocery trade division continued to outpace the market. We made acquisitions in line with our growth strategy in the Swedish building and how improvement rate and in the Finnish card rate. We have changed our financial reporting to comply with the new IFRS 16 leases standard. Also, we set new financial targets for the group. Our comparable operating profit for the quarter calculated in accordance with the new IFRS 16 standard totaled 1,000,000, while under the previous accounting practice, the figure would have been 1,000,000.
Finance net has increased to minus 1,000,000 as it includes 1,000,000 in interest expenses for lease liabilities. The eruption of the IFRS 16 standard does not have a material impact on our profit before tax. Which amounted to 1,000,000 slightly down from 0.34. The group's 1st the comparable sales decreased by 0.6 percent to 1000000 due to the timing of Easter and the decline in profit was 1,000,000, down from 1,000,000, driven by acquisitions increasing seasonality and the decline in car red sales. In the graph, we have given a breakdown of operating profit under the previous accounting practice as well as the impact of the IFRS 16.
The group had liquid assets of 1,000,000 at the end of the reporting period. Interest bearing net debt, excluding lease liabilities, totaled 1,000,000 and the corresponding net debt to EBITDA ratio was 0.4%. Lease liabilities accounted for 1,000,002 187,000,000. Cash flow from operating activities totaled 1,000,000 and 1,000,000 the impact of IFRS 16. Cash flow was strengthened by improved capital efficiency and to 1,000,000 return of surplus assets paid by KESSCO pension fund in March 2019.
The capital expenditure totaled 1,000,000, including 1,000,000 in acquisitions. Our financial position remained strong. Return on capital was 9 point 5% it remained good in grocery trade. Also the return in Carteret was still at a level despite the decline in sales. I will discuss next business development division, 1st, grocery trade.
1st quarter comparable sales increased by 0 point 4% to 1,000,002,64,000,000. Crossroadtrade comparable overhead profit was 1,000,000, up from 1,000,000. 1st quarter operating it improved despite the timing of Easter. K group's retail sales increased by 1.5% this clearly exceeded the market growth of 0.4%. We saw growth in all chains despite the timing of decision which fell on April this year.
Our customer numbers and market share continued to increase. Online sales growth continued strong and totaled 110%. Operating profit was posted by good development in oil change and increased operational efficiency. We continued with our strong transformation in grocery trade towards a better cash experience in all channels and pipe launching new digital services. Next, Building And Technical Freight.
1st quarter comparable sales increased by 5.6% to 1,000,000. Comparable operating profit was 1000000, down from 1,000,000 operating profit tends to be always in the first quarter. Acquisitions have increased seasonality, impacting first profit by minus 1,000,000. Sales growth in building and technical trade was particularly good in the politics, Finland and Poland in Norway, Claude was posted by the acquisitions made to strengthen the Turkmarker chain. Comparable growth in net sales was 5.6% overall development 8.1 percent.
Operating profit was 1,000,000, including a minus 1,000,000 impact from acquisitions increasing seasonality. More about the recently announced acquisition on the next slide. Extensive transformation program to improve profitability and strengthen market position is underway. Diversement of Onnen's Contractor business in Sweden will improve profitability and enable us to concentrate on the growing infrastructure construction business. Acquisition of Fresx will make Tesco, 1 of the leading building and home improvement rate operators in Sweden, Fresx has mainly small and medium sized P2P customers, specializing in renovation.
Its 2018 pro form a net sales was were 1,000,000 and comparable EBITA, 1,000,000. We expect to obtain significant economies of scale and synergies. In the specialty divestment of machinery trade operations is ongoing. Next in card rate. 1st quarter comparable sales decreased by 21.9% to 1,000,000.
The new emissions, testing and uncertainties regarding taxation and source of motivated power motive power have led to a temporary decline in net sales. At 1,000,000, card rates, 1st quarter comparable operating profit remained a good level despite temporary market disturbances. As just mentioned, despite market disturbances our car trade profitability remained good. Problems in car availability reduced temporarily our market share. We expect it to normalize in the second half of this year.
During the first quarter, we expanded our dealer network by acquiring businesses from huitistenlatoauto and LNG auto. Lastly, a few comments on the future. Our outlook standard that took effect on 1st January 2019. In comparable terms, the net sales as well as the comparable operating profit for continuing operations for the next 12 months are expected to exceed As a result of the successful execution of our growth strategy We have significantly improved our profitability and have been able to meet the target level for return on capital employed set in 2015 seen. The port of directors has approved new medium term financial targets for Tesco.
The new profitability targets are operating margin and return on capital employed. As for financial position, the group now targets maximum interest bearing net debt to EBITDA, excluding the impact of IFRS 16 earlier this year, we updated also our dividend policy. We will come in you to execute our growth strategy. The cornerstones of Tesco's strategy are profitability, growth profitable growth in all divisions and 1 unified K. This ends my prepared remarks.
Thank you for your attention. We will now be happy to answer any questions you may have.
1 on your telephone keypad. There will be a brief pause while questions are being registered. There will be a brief pause while questions are being registered. Speakers, it looks like we've got no question at this time. Sorry on the conference to you.
I could start with a couple of questions we have received online and I hope that they will be in a while. I hope there will be one more question. So to begin with the new financial targets that were announced, kind of time frame do you have in mind and, how have you or will you reach the set EBIT margin?
Yes, those new financial targets are for mid- to and in this occasion, which terms means time frame from 3 to 4 years. And about financial targets, we feel that those are absolutely very realistic, but also have enough challenges. There is definitely space in all three divisions for further improvements. But of course, the biggest profit improvement potential, we can see in billing and technical trade. But once again, I repeat that we can see clearly also space for further improvements in grocery trade as well as in card rate.
Operator, do we have some more questions or shall we take a few still online.
There's currently no questions from the Ojo participants. Just a reminder ladies and gentlemen, it's 012 question. So I'll hand over back to you until we do have questions from the telephone participants.
Okay, thank you. Then I have a question on a common costs could you elaborate on the level and, expectations on common costs for the full year?
Yes. Regarding the common costs, we had a bit heavier load on the cost side on common costs during the first quarter. So there were some sort of extra extra cost, during the quarter that might continue during the second quarter, still somewhat as we are adding to our new headquarters which we will take in use in June. So therefore, going to the 3rd fourth quarter, then we expect to get to a normal level again on the common cost side.
Okay. Another question on could you also elaborate a little bit on the impact of the acquisitions that you mentioned in building and technical trade and the seasonality. That you have mentioned?
Yes. And of course, we should remember that it did, and we completed successfully extremely important acquisitions in no way to strengthen our, building a technical trade and specifically retailing sales in bookmarker chain. But as everybody knows in building technical trade, seasonality is matter of fact. And 1st quarter always is very slow and making is very challenging. Most of players, including us, are normally loss making of our loss making operation in the first quarter.
Due to that reason, completed acquisitions in Norway weakened our financial performance in first quarter. But integration, we have done as planned, and can expect from all acquisitions, very strong sales development and big profit positive profit impact in the coming quarters as planned.
And maybe I can add a little bit to Mikael's comment, the other quarters are positive on that side and the strongest one is the 3rd quarter, but although the second quarter is is strong and actually the 4th one as well. So it really relates to the first quarter seasonality that we have in the Norwegian business when it comes to profitability. And of course,
we expect that we will close successfully acquisition, in speed. And I would like to remind that this is also from a point of view, extremely important move. And also risk chain is very profitable. All acquisitions in building and take medical trade will strongly improve our operational, our commercial as well as financial performance in future.
Okay. I hope also to get still some questions live from the call, but there is one more online. Could you describe what was the a little bit more on the rationale of the Frisks acquisition, what will you get? And also, what kind of synergy level, could you describe and quantify on the expectations there? And then also, what is the current situation and level of losses in Sweden?
As many times stated, we expect that the whole building and technical trade market and business will be consolidated heavily in the future. And Sweden is clearly the biggest and strongest market in Northern Europe. Also due to that reason, we can see that Sweden is very potential market for Tesco. And we are doing our utmost to participate a strong development of Swedish billing and technical trade business. As you know, we have had long time already a router chain in Sweden.
It has not been success story. Main reason is that K-RATA Chain has been very strongly dedicated B2C business, part fastest growing strongest market also in Sweden is P2P. And current measures to change K- router ongoing and that will make K- router more competitive in Swedish market but from a strategic point of view, fresh acquisition is utmost important because thanks to this acquisition, we will become now finally also a very big and serious player in fast growing Swedish P2P market. And our intention is to create strong point and combination of K- route as well as fresh chain and that way to become in position to serve and to participate successfully in P2C and P2P segment also in Sweden. On in technical trade, we are very happy that we successfully divested heavy cost making on and then contractor based and we continue in profitable infra business on On NEM side and remaining On NEM business, Fresh Chain and K route are very competitive set up.
But once again, I remind our intention also in future is to participate the process to consolidate Swedish market and we are in very good shape and in much better position thanks to actions ongoing in K Valta as well as thanks to acquisition of Freshk Group. NUKOM API, you can continue maybe just to add that on
the Unity side, we obviously target both for top line synergies as well as for the cost side synergies. So that work is obviously very important in this integration and look on, we will report in more detail on this issue.
Here do we have more questions?
That's for your information. I hear by consent. There's no questions from the telephone line at this stage.
Okay. Well, at this stage, we don't have online questions either. So
Okay. This is busy day. Many companies have published the first quarter results. But anyhow, thank you for your participation Kia Yuka, myself, we wish very present evening afternoon for everybody.
Thanks. And all so maybe would like to mention that 24th May, we have the Building And Technical Deep dive. If you wish to hear more details, please be in touch with me. And then otherwise at the latest, we'll see each other 24th July with our Q3 II results.
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